Canyon Bridge was launched with a focus on acquiring technology investments, but President Donald Trump on Wednesday dealt a body blow to its ambitions, blocking its first deal, a planned $1.3 billion acquisition of chipmaker Lattice Semiconductor Corp.

The Palo Alto, California-based buyout fund is partly backed by cash from China's central government and that link, first reported by Reuters in November, has proven controversial. Bingham has since left the boards of several tech companies, including Oracle Corp, due to concerns about his involvement with the firm.

US Treasury Secretary Steven Mnuchin said in a statement that the deal had national security concerns related to the use of Lattice's products by the US government.

Yet the company has said it no longer sells its chips to the US military.

Trump's rejection potentially hurts Canyon Bridge's ability to acquire other Western semiconductor companies, which could prove to be a high hurdle for a firm dedicated to investing in technology.

Sources have previously said Canyon Bridge has been working on a bid for British semiconductor company Imagination Technology Group. If Canyon Bridge clinches that deal, it would also be subject to review by the Committee on Foreign Investment in the US (CFIUS) review since Imagination Technologies acquired US chip designer MIPS in 2013.

While Canyon Bridge may choose to divest MIPS, which accounts for a small fraction of Imagination Technologies' business, there is no certainty that would be enough to resolve all CFIUS issues, according to the sources.

Canyon Bridge did not immediately respond to a request for comment for this story.

Before the 71-year-old tech sector veteran joined Canyon Bridge last year, he held several high-profile board seats, including Oracle, Cypress Semiconductor Corp and Flex Ltd.

Now, his only public board involvement is at human resources software firm TriNet Group Inc.

The turn of events for Bingham demonstrates the challenges of working with China-based investors, where state-backed funding can be a key hurdle to US deals. Canyon Bridge's Chinese state links were a bone of contention at Oracle, which expressed concern that Bingham's involvement with Canyon Bridge could hurt Oracle's relationship with the US government, according to a court filing.

Oracle's board told Bingham in March he could not retain his seat and continue to be a partner of Canyon Bridge, according to Bingham's deposition in Rodgers’ lawsuit. In response, Bingham decided to step down.

Bingham had received $890,902 in 2016 from Oracle, making him the second-highest paid board director at the company behind founder Larry Ellison. He also had an annual salary and bonus from Cypress worth $900,000, as well as equity grants worth $4.5 million. Bingham resigned from Cypress Semiconductor in June following a proxy fight at the company when founder, T.J. Rodgers, launched a proxy contest to remove him from the board. Rodgers alleged Bingham faced irreconcilable conflicts of interest because of his involvement with Canyon Bridge, a claim which Bingham and Cypress objected to. In late June, Bingham also resigned as chairman of the board of Flex, a contract manufacturing company. His resignation was "not a result of any disagreement with the policies, practices or procedures of the company," according to a Flex filing. A Flex spokesperson declined to comment further.

A TriNet spokesperson on Wednesday confirmed Bingham was still on the board.

"I chose to resign from these positions in order to focus all of my attention on an exciting new opportunity with Canyon Bridge, Ray Bingham said in a statement late Wednesday.

"I am thrilled to be part of Canyon Bridge and very optimistic about our future as a fund committed to helping technology companies become true market leaders around the globe."